Date:
June 2003
More Pleasing Results on the Economic Front
Government
revenue collections in May again exceeded
their particular target allowing the government
to keep its budget deficit under control.
May inflation figures also look pleasing.
Preliminary figures for May 2003 released
by the Bureau of Internal Revenue show that
collections were on target. Actual collections
amounted to P36.36 billion against projections
of P36.348 billion. Actually the target was
exceeded by a miniscule 0.03% but this did
not stop the Bureau from its claim that the
target was exceeded (and so it was).
Perhaps of greater significance is that actual
collections in May were up by some 17.7% on
the corresponding period for May last year
while collections for the first five months
were up by 10.4%.
According to the BIR, the pleasing performance
was due to the increase in collections from
the Large Taxpayers Service division. It is
this division of BIR that accounts for most
of the tax income collected. Collection performance
of the regional offices has also improved
with the 19 regional BIR offices reporting
a boost of more than 30% so far this year.
The Customs Bureau appears likely to also
exceed its May target although figures for
the complete month are not yet available.
As a result of the improving tax collection
performance, the budget deficit is expected
to come in at around P7 billion and well below
the government’s target of P20 billion.
Consumer
price inflation in May 2003 continued the
low-inflation trend of recent months. The
year on year rate for May amounted to 2.7
percent. This brings the year-to-date rate
down to an average of 2.8% as compared to
2.9% to end-April. The inflation rate for
the year as a whole appears likely to come
in at around 2.7% and down from earlier estimates
of between 4% and 4.5%.
With the prospect of some much-needed pump
priming for the small business sector in the
months ahead and as the government gears up
for next year’s election analysts appear to
be more robust in their economic outlook than
they have been for some time.
Banking officials still believe that there
could be some weakening of the peso in the
shorter-term and some are even predicting
a fall to around the 55.0 level against the
US dollar at the height of the import season
in August/September although they believe
that once the import surge is over the peso
will likely fall back to around current levels.
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